Spouses Mariano P. Marasigan And Josefina Leal vs. Chevron Phils.

G.R. No. 184015; February 8, 2012

Mendoza, J.

FACTS:
Spouses Marasigan, as operators of a gasoline station in Montalban, Rizal, and Chevron entered into a
dealership and distributorship agreement wherein the former can purchase petroleum products from the
latter on credit. Spouses Marasigan exceeded their credit line and owed Chevron the amount of ₱
12,075,261.02 but failed to pay the obligation despite oral and written demands from Chevron. Thus,
Chevron through its counsel, ACCRALAW, initiated foreclosure proceedings by filing a petition for
extrajudicial foreclosure against the real estate mortgages executed by Spouses Marasigan in favor of
Chevron.

Chevron, however, was only able to recover the total amount of ₱ 4,925,000.00 from the public auction
sales of the mortgaged properties including the sale of the 167.1597 hectare coconut farm property located
in Mulanay, Quezon, which was sold for ₱ 130,000.00 to the only bidder, ACCRA
Investments,Corp. (ACCRAIN). Subsequently, Chevron filed a complaint against Spouses Marasigan
before the RTC–Makati to recover the deficiency.

Spouses Marasigan filed a complaint against Chevron, ACCRAIN and ACCRALAW and Sheriff Romeo
Villafranca before the RTC-Gumaca. They alleged that the bid price was grossly inadequate and shockingly
low which rendered the foreclosure sale fatally defective and the foreclosure proceedings invalid and illegal.
Chevron, ACCRAIN and ACCRALAW filed a motion to dismiss citing as ground Spouses Marasigan’s
failure to disclose in their certification against forum shopping the pending case filed before the RTC-Makati
and the consequent violation of the rule on litis pendentia.

The RTC-Gumaca issued an order denying the motion to dismiss, and ruling that there was no forum
shopping because there was no decision yet in the RTC-Makati case when the RTC-Gumaca case was
filed and that there were parties in the former who were not parties in the latter.

Upon appeal, the CA rendered a decision reversing and setting aside the RTC decision. The CA ruled that
Spouses Marasigan committed forum shopping and that all the elements of litis pendentia are present.

ISSUE:
Are the elements of litis pendentia present when petitioners filed a civil case before the RTC-Gumaca when
a civil case was pending before the RTC-Makati?

HELD:
Yes. Litis pendentia is a Latin term, which literally means "a pending suit" is a ground for the dismissal of a
civil action, it refers to the situation where two actions are pending between the same parties for the same
cause of action, so that one of them becomes unnecessary and vexatious. It is based on the policy against
multiplicity of suits.

Litis pendentia requires the concurrence of the following requisites: (1) identity of parties, or at least such
parties as those representing the same interests in both actions; (2) identity of rights asserted and reliefs
prayed for, the reliefs being founded on the same facts; and (3) identity with respect to the two preceding
particulars in the two cases, such that any judgment that may be rendered in the pending case, regardless
of which party is successful, would amount to res judicata in the other case.

In this case, all the requisites of litis pendentia are present.

The first element, identity of parties, or at least representing the same interest in both actions, exists since
Chevron and Spouses Marasigan are the same parties in the RTC-Makati Case and the RTC-Gumaca
Case. The absence of ACCRAIN and ACCRALAW as party plaintiffs in the RTC-Makati case and their
additional presence as party defendants in the RTC-Gumaca case would not unfavorably affect the
respondents because the rule does not require absolute identity of parties. A substantial identity of parties
is enough to qualify under the first requisite.

The second element, identity of rights asserted and reliefs prayed for, the reliefs being founded on the same
facts, likewise subsists here since although both cases differ in form or nature, the same facts would be
alleged and the same evidence would be presented considering that the resolution of both cases would be
based on the validity and enforceability of the same credit lines, real estate mortgages and foreclosure
proceedings. Indeed, the true test in determining the identity of causes of action lies not in the form or
nature of the actions but rather in the evidence that would be presented. The test to determine identity of
causes of action is to ascertain whether the same evidence necessary to sustain the second cause of action
is sufficient to authorize a recovery in the first, even if the forms or the nature of the two (2) actions are
different from each other. If the same facts or evidence would sustain both, the two (2) actions are
considered the same within the rule that the judgment in the former is a bar to the subsequent action;
otherwise, it is not. This method has been considered the most accurate test as to whether a former
judgment is a bar in subsequent proceedings between the same parties. It has even been designated as
infallible.

Finally, the presence of the third element, that the identity of the two cases should be such that the judgment
that may be rendered in one would, regardless of which party is successful, amount to res judicata in the
other, cannot be disputed either. Spouses Marasigan do not deny the fact that the affirmative defense that
they raised in the RTC-Makati case was the illegality of the foreclosure sale of the Mulanay property. They
raised the same issue in the RTC-Gumaca case. As correctly ruled by the CA, the judgment in the RTC-
Makati with regard to the validity of the foreclosure sale of the Mulanay property will constitute res judicata
in the case, and vice versa. The Court also agrees with its ruling that the RTC-Makati case should be the
priority case because it was filed earlier and, therefore, the appropriate vehicle for litigating all issues in this
case.

Therefore, the Court having ruled that the CA properly dismissed the petitioners’ complaint due to the
presence of litis pendentia and the violation of the rule on forum shopping, the petition is DENIED.